Need help with this question solution general accounting Aztec Products wishes to evaluate its cash conversion cycle(CCC). Research by one of the firm's financial analystsindicates that on average the firm holds items in inventory for65 days, pays its suppliers 35 days after purchase, and collectsits receivables after 55 days. The firm's annual sales (all oncredit) are about R2.1 billion, its cost of goods sold representsabout 67 percent of sales, and purchases represent about 40percent of the cost of goods sold. Assume a 365-day year. Whatis Aztec Products' cash conversion (CCC)?

Step 1: Define Cash Conversion CycleThe cash conversion cycle is the days taken by the company for…

Answered: Aztec Products wishes to evaluate its…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter17: The Management Of Cash And Marketable Securities

Section: Chapter Questions

Problem 2P

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Aztec Products wishes to evaluate its cash conversion cycle (CCC). Research by one of the firm’s financial analysts indicates that on average the firm holds items in inventory for 65 days, pays its suppliers 35 days after purchase, and collects its receivables after 55 days. The firm’s annual sales (all on credit) are about R2.1 billion, its cost of goods sold represent about 67 percent of sales, and purchases represent about 40 percent of cost of goods sold. Assume a 365-day year. What is Aztec Products’ cash conversion (CCC)? If Aztec could shorten its CCC by 5 days, would it be best to reduce the inventory holding period, reduce the receivable collection period, or extend the accounts payable period? Why? How should the firm manage its inventory, accounts receivable, and accounts payable in order to reduce the length of its cash conversion cycle?
What is the length of loud noise recordings' cash conversion cycle (CCC) for this accounting question?
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Antonio is an analyst at Barrilla Group. The firm turns over its inventory 5 times each year. It has an average collection period of 50 days and an average payment period of 20 days. The firm’s annual sales are €12 million. Assume there is no difference in the investment per euro of sales in inventory, receivables, and payables, and assume a 365-day year.a.Calculate the firm’s cash conversion cycle, its daily cash operating expenditure, and the amount of resources needed to support its cash conversion cycle.b.Find the firm’s cash conversion cycle and resource investment requirement if it makes the following changes simultaneously.(1)Shortens the average age of inventory by 10 days.(2)Speeds the collection of accounts receivable by an average of 15 days.(3)Extends the average payment period by 5 days.c.If the firm pays 15% for its resource investment, by how much, if anything, could it increase its annual profit as a result of changes in part b?d.If the annual cost of achieving the…
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"You have recently been hired to improve the performance of Multiplex Corporation which has been experiencing a severe cash shortage. As one part of your analysis, you want to determine the firm's cash conversion cycle. Using the following information and a 360-day year, what is your estimate of the firm's current cash conversion cycle? Current inventory = $120,000. Annual sales = $600,000. Accounts receivable = $160,000. Accounts payable = $35,000. Total annual purchases = $360,000. Purchases credit terms: net 30 days. Receivables credit terms: net 50 days. " Group of answer choices 195 days 177 days 171 days 201 days 181 days

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